Overview of Billing Using Milestones
Milestone billing lets you bill customers as an event happens or using an ad-hoc date. At the same time, you can also recognize revenue based on ad-hoc dates or milestones that your finance department prescribes.
How it Works
Each bill line amount on a subscription corresponds to a billing milestone. The percentage of the charge amount is the bill line amount of the milestone. The interface date of the bill line is the completion date of the milestone.
The application creates a revenue line for the charge. The completion date of the milestone is the satisfaction date. Every satisfaction event corresponds to recognising a percentage of the allocated revenue.
The milestones are billed by identifying those that are complete, updating the completion date for them, and then interfacing the bill lines to Accounts Receivable.
Setup Overview
This table shows the high-level setup steps for milestone billing and where to find more information on each:
| Step | Where to Find More Information |
|---|---|
| Define milestone names and Milestones sources in two lookup types. | Define Milestones |
| Define milestone templates. | Define Milestone Templates |
| Create a subscription and select a subscription product (not a coverage) with a one-time charge. | Use Milestone Billing |
| Assign the MBBRR template to the one-time charge and update the milestones as required. Then generate the bill lines for the milestones. | Use Milestone Billing |
| Activate the subscription and then send the bill lines to Oracle Accounts Receivable and revenue information to Oracle Revenue Management Cloud. | Use Milestone Billing |
Tips and Considerations
Here are some tips and considerations to keep in mind when using milestone billing:
- The MBBRR template can only be associated with a one-time charge of a subscription product in a subscription.
- A one-time charge of a coverage type of subscription product can't have an MBBRR template.
- It's recommended that if milestones are going to be used for billing or revenue recognition, that a separate subscription with only a one-time charge be used. This is because, in case of amendment, a one-time charge with an MBBRR template instance isn't copied over to the new subscription product line.
- Since the interface date of the bill lines is entirely determined by the completion date entered in the template instance, you can bill on an ad-hoc basis. This means that you can enable milestone-based billing, even if you don't bill strictly based on milestones, but instead use this feature to bill on an ad-hoc basis. For example, if there's a one-time charge that has to be billed monthly for the first year and quarterly for second year, then you can create 12 milestones with completion dates spaced a month apart and then 4 more milestones spaced a quarter apart.
- If the bill schedule line is created from an MBBRR template instance, then the line amount can be adjusted in the bill line actions.
- Duplicating a subscription doesn't copy the MBBRR template.
- Renewing (both manual and automatic), a subscription doesn't copy the MBBRR template to the subscription created upon renewal.
- Milestones can be imported and assigned to a subscription product's one-time charge.
- The suspend action isn't available for a subscription product that has a one-time charge with an MBBRR template assigned.
- During amendment, the one-time charge with an MBBRR template isn't copied over to the new subscription product line. Therefore, the bill schedule lines (interfaced to Accounts Receivable and not yet interfaced to AR) from the amended subscription product line aren't copied to the new subscription product line. Those bill lines remain in the subscription product lines in Under Amendment status. Even after activation of the new product line, when the previous subscription product line becomes Closed, those Bill lines (both interfaced and non-interfaced) remain the in the Closed line. You can continue to complete the unbilled milestones and recognise revenue for the revenue milestones when they're completed.
- If you're importing or creating the milestone template instance through REST APIs, then you can avoid passing a template name. Passing the attributes MilestoneBillingFlag = Y and MilestoneRevenueFlag = Y enables the billing milestones and revenue recognition milestones sections, respectively, in the UI. Additionally, if you pass milestones for billing or revenue recognition and also an MBBRR template ID or name then the aforementioned flags in import or REST API, payload will prevail over the value of these flags in the MBBRR template. So, you may see that though an MBBRR template doesn't have revenue recognition milestones or billing milestones, yet in the subscription product, these sections are enabled.
- Evergreen subscriptions can't have one-time charges with an MBBRR template. You will see a validation error.
- Pricing terms don't have any impact on one-time charges with MBBRR template.
- If a subscription is in on On Hold status, the bill lines aren't interfaced to Accounts Receivables irrespective of the completion date of the milestones.
- If periodic recognition of revenue or periodic billing is enabled for a one-time charge, then you can't attach an MBBRR template to the one-time charge. The charge level attributes for billing and revenue recognition take precedence over the MBBRR template.